In rural swaths of Pennsylvania, fast internet is a literal pipe dream.

Residents in sparsely populated areas with little or no high-speed infrastructure say it’s next to impossible to stream TV shows, telecommute, do videoconferencing or consistently access their cloud-based email. Businesses struggle with slow connections, too. “Incredibly frustrating,” said Leslie Demmert, a retired Penn State staffer whose poky DSL service kept her from paying bills online.

Thus a renewed push by state officials to capture $140 million in federal subsidies for rural broadband, a windfall that could go to another state after Verizon declined it two years ago. The Federal Communications Commission plans to distribute the rejected funds through an upcoming nationwide auction, a move that state officials are trying to head off through public advocacy and a pending FCC petition.

“We are deeply concerned that the loss of this funding will widen the gap between Pennsylvania communities and businesses that have access to higher broadband speeds, and those without — not just between rural areas and larger cities, but also, in many cases, between neighbours in the same counties,” said Pennsylvania Public Utility Commissioner David Sweet.

About 800,000 Pennsylvania residents lack access to high-speed internet, most of them in more remote areas of the state, according to the FCC. Twenty per cent of rural Pennsylvanians do without speedy internet connections, compared to 3 per cent in urban areas, an example of the so-called digital divide between technological haves and have-nots.

Verizon qualified for an FCC program, the Connect America Fund, which helps telecommunications companies pay for the cost of new network infrastructure or upgrades. But Verizon declined subsidies in 11 states, including more than $23 million in annual funding to expand high-speed internet to 64,620 Pennsylvania homes and businesses. A total of 64 counties were impacted, including 31 counties that stand to lose at least $1 million each over six years. The FCC money comes from a surcharge on phone bills.

Verizon spokesman John Johnson said the company supports Pennsylvania’s efforts to keep the federal money. Verizon, whose Fios high-speed fiber network is primarily available in metro areas up and down the East Coast, declined the funding because “we committed to a certain amount of Fios network build and since 2010 have focused on completing that work … before looking at building fiber in new areas,” Johnson said.

The decision means that customers like Jake Weldon might not see a speedy wired internet connection anytime soon.

Weldon, a tractor supply owner, said his persistently slow DSL connection is a huge headache. Many facets of the business are conducted online, from parts lookup and ordering to counter sales and business management.

“It’s a major problem for us, and it’s frustrating when you’re across the counter from a customer trying to complete a sale and you watch the spinning ball,” he said. “We’re just sitting here watching that ball spin around.”

Occasionally, the system times out and the sale can’t be completed. Weldon said the problem seems to worsen around 4 p.m., when kids come home from school and hop on the internet, taxing the aging copper network.

“If you run a small business in a small, rural community somewhere in Pennsylvania, you really need safe, secure, speedy service in order to compete,” said Sweet, the state utility commissioner.

The utility commission joined state economic development officials in petitioning the FCC to modify its auction rules to give additional weight to Pennsylvania bidders. The FCC has yet to rule on the petition, which was submitted in April, though it has previously declined to give preference to states where phone companies turned down the funding. One exception was New York, which received an FCC waiver and will retain access to up to $170 million in rejected federal subsidies. The FCC cited New York’s $500 million broadband program in granting the auction waiver.

“No other state has demonstrated that they have adopted a similar program that would achieve the same or similar public interest benefits,” the FCC said in a filing.

Unlike New York, Pennsylvania, the only other state to formally request the declined Verizon subsidies, has no dedicated funding stream for rural broadband. State officials argue they could tap money in existing economic development grant programs to help supplement the FCC funding.

Kathy Parsons, a school secretary who lives up the road from Weldon’s tractor store, said the region’s clunky internet is “hard on the kids,” for whom so much schoolwork is now web-based.

She said her own home DSL connection is sluggish and unreliable.

“It just makes you mad paying that much per month, and it’s so slow and it goes down and of course they don’t reimburse you for the time it’s down,” she said.

Will it be a hot war with protest and acrimony, like Uber vs. taxis? Or is the outcome inevitably foretold, no matter what, as in Netflix vs. Blockbuster?

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